There are days I wish I could relive, where people and the memories seem to be perfectly happy, living in moments of laughter and the simplicity life provided at the time. Our memories of the past are fond and life was certainly simpler but times are a changing. What some people cannot bring themselves to do, when it comes to owning a small business is to adapt to changing circumstances regardless of what their accountants advice.
Some years ago we got a new restaurant client that had a serious problem, the previous owner’s books and records were virtually non existent. Fortunately when they found themselves in the crosshairs of the Department of Labor they were prepared for them. They had listened to us and implemented an accounting system that accurately reflected their Sales and Payroll.
New York State has been actively visiting worksites unannounced and are making rather large assessments, DOL audits are particularly gruesome as their position taken are mostly intractable. But beware because the Department of Labor will send an auditor to your restaurant.Here walks in a Man and/or Woman, they are seated, given a menu and their order is taken, no problems right? WRONG. As it turns out this Man and/or Woman is an Auditor for the DOL. There they are, mentally counting heads, keeping track of every single individual they see working under your employment. They will often speak to them to determine there hours worked.
The Auditor can now go back to your NYS-45 Tax filings to figure out exactly how many employees you claim to employ, the calm before the storm. Until the day you as the business owner is made aware of a Department of Labor Audit, yeah, not exactly the news you wanted to hear.
If only you as the owner had just listened to your accountant, why oh why did I not change my ways! Well lucky for you this is just a short story illustrates how simply this could happen to you and your business and what you need to do to avoid it.
And in this case, BECAUSE we made our client aware of the imminent dangers that lay ahead, they made the correct changes and avoided a huge assessment, having had to only pay a small Unemployment Insurance assessment.
Hopefully, we have in a colorful way informed and convinced you to change for the better, if you just make some changes, the state may just decide to skip your audit or in the worst case scenario not be in a position to make a large assessment. Remember, without the adequate needs an employer is at the mercy of a DOL auditor.
Be prepared, don’t keep your head in the sand and listen to your accountant as the times are a changing.